First home buyers will be largely disappointed with today's Budget.
While $3 billion was allocated to housing and infrastructure, unsurprisingly, Finance Minister Grant Robinson in his address largely ignored home buyers and concentrated, instead, on funding the building and acquisition of 8,000 state homes.
I say unsurprisingly because highest on my wish list was a complete revamp of the KiwiBuild or affordable homes scheme, and any revamp would have been in the works for many months before Covid-19 came along.
The one sector of the property industry that should be happy with the budget is property developers. The large amount of funding that has been pushed towards state housing will be a big help for property developers who have, at times, struggled with pre-sales to the general public. Of course, this benefit will flow through to their employees who will be assured of work in the construction industry for the next few years.
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Also absent from the Budget was an adjustment to the criteria for the First Home Grant (still referred to as the HomeStart Grant in the Budget Papers). There was a small hope that a loosening of the criteria required to get the First Home Grant would have allowed more first home buyers to get into their home early. The criteria for the grant has largely gone unchanged since its implementation in 2015 and it is generally viewed that the purchase limits, particularly in Auckland where it is $600,000 for an existing house, is almost impossible to achieve even on the outskirts of the area.
While home buyers won’t benefit a lot from the Budget, the removal of the LVR funding restrictions at the end of last month and the lowering of the OCR in mid-March will have much more effect on home owners and home buyers than any announcement in the Budget could have achieved.
- Rupert Gough is the founder and CEO of Mortgage Lab and author of The Successful First Home Buyer
